Reserve Bank Of Zimbabwe Monetary Policy Statement – Highlights

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Reserve Bank Governor Dr. John Panonetsa Mangudya presented his Monetary Policy today amidst failure to effectively supervise and manage the financial system and below are the highlights.

The Monetary Policy Statement is issued in terms of Section 46 of the Reserve Bank of Zimbabwe Act [Chapter 22:15]

STRENGTHENING THE MULTI-CURRENCY SYSTEM FOR VALUE PRESERVATION & PRICE STABILITY

Economy is expanding on account of high consumer demand, increased business confidence within the national economy and positive expectations following the peaceful completion of the electoral process and the subsequent formation of a new lean cabinet led by His Excellency, President E. D. Mnangagwa.

The country showed strong resilience to adverse inflationary pressures and speculative tendencies which characterized the run-up to the harmonized election period.

We are optimistic that the economy will surpass the initial growth projection of 4.5%, and register growth of around 5% this year. This optimism is underpinned by better-than-anticipated performance across the key sectors of the economy, in particular agriculture, mining, tourism and manufacturing during the first six months of the year.

The Bank has continued to work on efforts to improve the foreign currency situation currently bedeviling the economy.

The Bank is also encouraged by the quantum leap in the usage of plastic money, electronic and mobile money payment systems, by the Zimbabwean public.

POLICY MEASURES

No change in Bond Notes 1:1 policy.

Banks introducing separate FCA accounts for Nostro and RTGS funds.

Foreign trucks transiting in Zimbabwe now required to pay for fuel in foreign currency.

Surprise appearance by Minister of Finance Mthuli Ncube who delivered a “fiscal policy roadmap”:

Government domestic debt now at USD9 billion. Budget deficit funded through domestic borrow and recourse to the central bank blamed. Government borrowings from RBZ stood at $2.3 billion at the end of August. This is three times the statutory limit of $762 million.

Treasury Bills issued stood at $7.6 billion at the end of August. This is up from $2.1 billion in 2016.

Money transfer tax reviewed ‘downwards’ from the current 5 cents per transaction to 2 cents per dollar.

Government in talks to clear $2.5 billion owed to World Bank, Afdb and the European Investment Bank.

Foreign Payment Transactions.

In order to minimize incidents of externalization of foreign currency, the following measures, which are in line with international best practice, have been put in place for banks and the banking public to adhere to:-
(i) Use of Letters of Credit (LCs) for high value transactions.
(ii) All imports to be supported by invoices whose banking details match with the payee’s name and bank account details.
(iii) Strict adherence by banks to customer due diligence (CDD).
(iv) Export proceeds to be remitted on a timely basis in line with existing rules and regulations.

See the full Monetary Policy Statement 29 September 2018

 

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